CVR Partners Earnings: An Early Look

Earnings season is now starting to wind down, with most companies already having reported their quarterly results. But there are still some companies left to report, and CVR Partners (NYSE: UAN  ) is about to release its quarterly earnings report. The key to making smart investment decisions with stocks releasing their quarter reports is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise. That way, you'll be less likely to make an uninformed knee-jerk reaction to news that turns out to be exactly the wrong move.

The fertilizer industry has been red-hot lately, and CVR Partners has benefited from trends that have given it a competitive advantage against some of its peers. But how long can the good times last? Let's take an early look at what's been happening with CVR Partners over the past quarter and what we're likely to see in its quarterly report on Wednesday.

Stats on CVR Partners

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$54.35 million

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Will CVR Partners help its unit price grow?
Analysts have had mixed views on CVR Partners lately. They've cut their fourth-quarter earnings estimates on the fertilizer master limited partnership in the past few months, but they've gotten more optimistic about its 2013 prospects, raising EPS estimates by $0.15. The partnership units, however, have gone nowhere, falling about 1% in price since mid-November.

CVR Partners is a rising player in the nitrogen fertilizer business, producing ammonia and urea ammonium nitrate fertilizer. By using petroleum coke as feedstock, most of which it obtains through a 20-year agreement with CVR Refining (NYSE: CVRR  ) , CVR Partners has a locked-in source of raw materials to produce its fertilizers. With general partner CVR Energy (NYSE: CVI  ) leading both CVR Partners and CVR Refining, the relationship among the three entities is well-supported.

With what amounts to a vertically integrated business, CVR Partners has some advantages over rivals Terra Nitrogen (NYSE: TNH  ) and Rentech Nitrogen Partners (NYSE: RNF  ) . With low natural gas prices, Terra and Rentech haven't had any trouble with their own production. But in the future, if nat-gas prices rise substantially above what CVR has to pay for petroleum coke, then CVR will gain a major margin advantage.

But last month, CVR gave investors some bad news by cutting its quarterly distribution by more than 60%. The company blamed scheduled plant maintenance activity during October as having greatly reduced its operations during the quarter, making it seem as though the drop would likely be temporary.

In its quarterly report, watch for early signs that this quarter has had CVR's operations return to normal. If the company posts temporarily weak results, it could simply be a buying opportunity if CVR's distribution ends up rising against next quarter.

CVR's unusual way of making use of its sister partnership's petroleum coke is just one way to play the booming energy sector. The Motley Fool's analysts have uncovered another under-the-radar company that's dominating its industry. To get the name and detailed analysis of this company that will prosper for years to come, check out the special free report: "The Only Energy Stock You'll Ever Need." This is a limited-time offer, though, so don't miss out. Click here to access your report -- it's totally free.

Click here to add CVR Partners to My Watchlist, which can find all of our Foolish analysis on it and all your other stocks.

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Related Tickers

5/26/2016 4:02 PM
UAN $9.24 Up +0.09 +0.98%
CVR Partners, LP CAPS Rating: ****
CVI $19.50 Down -0.71 -3.51%
CVR Energy CAPS Rating: ***
RNF $0.00 Down +0.00 +0.00%
TNH $102.86 Down -0.72 -0.70%
Terra Nitrogen Com… CAPS Rating: ****